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Key Topics
Requirement
Write a 1,500 to 2,000-word report on the following enterprise systems issues:
1. How do enterprise systems contribute to organisational performance, and how do we measure such contributions?
2. What are the principal drivers behind businesses adopting a supply chain management system?
3. What are the organisational change management considerations necessary for successful adoption of an enterprise system?
Solution
Introduction
In the era of digitalization, the implementation of Information System is considered as significant for the business in gaining smooth operation. However, information system is being used in different form and thus it was becoming difficult for the organisation to use the information system in an integrated way. It was very much difficult for managers for integration of the data from separate system. The introduction of Enterprise System eliminated this issue. Enterprise system is considered as the cross function of the information system, which helps the organisation by integrating the process of business as well as assists in resource planning of the organisation. Enterprise System assists in resource planning and thus the information can flow smoothly across the organisation. The different processes of business like sales, manufacturing, human resource and logistics are being integrated within the process of organisation.
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Contribution of Enterprise System to organisational performance
Enterprise System is being designed for organising numerous roles as well as processes of business. It incorporates the significant internal processes of business within the single software in order to provide excellent coordination, decision-making and efficiency. Enterprise system helps the organisation to manage their supplier through supply chain management system by optimising the planning, manufacturing, product and service delivery and tracking. CRM System helps in coordinating the processes of the business with the customers of the organisation (Laudon & Laudon, 2016). Knowledge management system helps the organisation for improvement of knowledge circulation. Both Intranet as well as Extranet utilises the Internet technology for integrating the information.
Enterprise System also helps the organisational performance in the following ways:
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Storing the data of the business in Usable Format- The significant aspect of Enterprise system is that it helps in storing the business, which helps in improving the experiences of the customers. This data includes the order history of the customers, time and location of the order made by the customers and the processing time of the order. Enterprise system provides the organisation the capability of retrieving this information and answers the question of the customers, which improves the satisfaction of the customers and thus enhances the organisational performance (Sykes et al., 2014).
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Information can be accessed within the real time: With the rapid change in the business environment, waiting for receiving data is impossible. Enterprise system has the significant powerful feature of providing the significant information within the real time. This helps the organisation to compute their financial job, marketing job and other job rapidly with perfect analysis (Shen et al., 2016). Thus the organisational performance is being enhanced.
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Better Management of Business through automation of the business: Both performance metrics as well as measurements are essential for computing the organisational performance as well as establishing the future goals of the business. The growth of the organisation will be restricted with the manual evaluation of sales margin, ratio of profit and different data of various departments and maintaining them in an integrated way (Sykes et al., 2014). Enterprise System helps the employees to compute the data and shared among the different departments and the software itself is so designed that it can maintain data in an integrated way.
The contributions of ERP towards the organisational performance are being measured in three perspectives:
Financial Perspective:
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Computing whether there is reduction n costs of operation and administration
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Computing whether there is reduction in stock level
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Computing whether there is increase in turnover
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Computing whether there is reduction in costs of IT
Customer Perspective:
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Computing whether there is improvement in satisfaction of customers
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Evaluating whether there is improvement in on-time shipments and sharing of external information
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Computing whether there is reduction in the lead times of
Perspective of Internal Business
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Computing whether there is improvement in productivity as well as enhancement in efficiency of operation
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Evaluating the enhancement of utilisation of resources
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Computing how much the process of business is improved
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Computing the reduction in processing time of data
Principal drivers behind businesses adopting a supply chain management system
The principle drivers that are responsible for making the organization to adopt the supply chain management system are as follows:
Boosting Customer Service: Supply chain management system helps in boosting the customer service as it provides appropriate assortment of the product to the customers and the exact quantity is delivered to the customers. It also provides the right location of product to the customers with the appropriate delivery time of the products and providing the right support after the sale to the customers (Huang & Handfield, 2015).
Reduces the Cost of Operation- Supply Chain Management System helps in decreasing the cost of purchase and thus the organization adopts this system. Organization heavily relies on this system as it can promptly deliver the expensive products and avoid the store’s inventory costs. It also decreases production costs. Organization relies on supply chain management system for delivering the products from the manufactures to the stores. It helps in avoiding the shortages of materials which can cause the shutdown of the production. It also decreases the total costs of supply chain. Organization relies on this system for designing the network for meeting the service goals of customers at least cost. With efficient as well as effective supply chain the organization can achieve the competitive advantages in the market (Huang & Handfield, 2015). The system helps in enhancing the inventory system, enhances the responsiveness of the system for the actual requirements of the customers and improves the relationship in between the vendors as well as distributors. Thus it helps in reducing the cost of operation.
Improves the financial position - Supply Chain management system helps in improving the financial position of the organization. It increases the profit leverage of the organization as the system has the capability in controlling as well as reducing the costs of supply chain. This helps in dramatic enhancement of the organizational profit (Lin, 2014). The system also helps in increasing the cash flow as it has the ability of speeding up the flow of products to the customers.
Higher rate of efficiency of the Supply chain management system: The higher rate of efficiency is being achieved with the system as it will help in implementing the innovation strategies of the products. The organization will also help in predicting fluctuating economies, market emergency as well as shorter life cycles of products.
No Delays in the processes: The primary benefit of the system is the communication it provides within the organizational process and thus there are no delays within the processes. As every employee is aware about the shipments of the product, thus there are no delays in the process of shipments (Lin, 2014).
Required Change Management within the organization for Successful Adaptation of Enterprise System
The change management strategies those are required for the adapting the Enterprise System successfully is as follows:
Accepting the Cultural Consideration: Cultural consideration is significant for the change management strategy. There will be differences existing in form of language, demographic and education and these are having essential impacts on the employees understanding and perceiving power (Burke, 2017). They need to comprehend the benefit of implementing the enterprise system within the organization.
Communication: Appropriate communication can assists in successful implementation of the enterprise system. The factor of buy-in is having high impact on success of enterprise system implementation. Communication is significant as the employee will not accept the changes if they fail to understand why the changes are being implemented within the system (Almajali et al., 2016). Therefore, communication strategy is essential for the change management process.
Analysis of Stakeholders: This change management strategy is important as this will define the stakeholder’s role for conducting the job of enterprise system. This strategy will help in having the idea about which staffs will perform what type of jobs. Roles, which are being defines in this stage are as follows:
Leaders will provide both the direction as well as alignment for the new implemented system. Super Users will comprehend the process of business for the respective departments. End users will feed enterprise system with data (Kobersy et al., 2015).
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Training to the end users: It is significant to implement training strategy for the end users that are the employees who will use this system. It is essential for the staff to be trained well with the software for utilising the system to the full potential for gaining the maximum advantages from the system (Burke, 2017). It is also important in conducting the web seminar for the employees for making them understand the way of using the enterprise system.
Conclusion
In the above stated discussion of the report it is being discussed about how positively the Enterprise system affects the performance of the organization. It also discusses about the ways by which the contribution of ERP for the organizational performance are being measured. It exhibits that Supply Chain Management system helps the organization in performing excellently. However, the management of the organization faces difficulties in implementing the change strategy for successful implementation of ERP. The changes strategy that could be adopted by the change management is also been discussed over here.
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Almajali, D. A., Masa'deh, R. E., & Tarhini, A. (2016). Antecedents of ERP systems implementation success: a study on Jordanian healthcare sector. Journal of Enterprise Information Management, 29(4), 549-565.
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Burke, W. W. (2017). Organization change: Theory and practice. Sage Publications.
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Huang, Y. Y., & Handfield, R. B. (2015). Measuring the benefits of ERP on supply management maturity model: a “big data” method. International Journal of Operations & Production Management, 35(1), 2-25.
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Laudon, K. C., & Laudon, J. P. (2016). Management information system. Pearson Education India.
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Lin, H. F. (2014). Understanding the determinants of electronic supply chain management system adoption: Using the technology–organization–environment framework. Technological Forecasting and Social Change, 86, 80-92.
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Shen, Y. C., Chen, P. S., & Wang, C. H. (2016). A study of enterprise resource planning (ERP) system performance measurement using the quantitative balanced scorecard approach. Computers in Industry, 75, 127-139.
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Sykes, T. A., Venkatesh, V., & Johnson, J. L. (2014). Enterprise system implementation and employee job performance: Understanding the role of advice networks. MIS quarterly, 38(1).
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Kobersy, I. S., Barmuta, K. A., Muradova, S. S., Dubrova, L. I., & Shkurkin, D. (2015). The system of the methodological principles of management of enterprise development. Mediterranean Journal of Social Sciences, 6(3 S4), 25.
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